Genetic testing agency 23andme recordsdata for chapter safety – INA NEWS

Genetic testing agency 23andMe has filed for Chapter 11 chapter safety in the US amid weak demand and losses from a 2023 information breach. Its co-founder and CEO has resigned.

San Francisco-based 23andMe introduced on Sunday that it’s going to look to promote “considerably all of its property” by means of a court-approved reorganisation plan.

The corporate’s shares fell 50 % to 88 cents in Monday buying and selling after co-founder Anne Wojcicki, who made a number of failed takeover bids, resigned as CEO. 23andMe didn’t say whether or not there are different bidders. It’s going to proceed to function through the sale course of, having secured $35m in financing over the weekend.

Wojcicki intends to nonetheless bid on 23andMe as the corporate pursues a sale by means of the chapter course of. In a press release on social media, Wojcicki stated she resigned as CEO to be “in one of the best place” as an impartial bidder.

“There isn’t a doubt that the challenges confronted by 23andMe by means of an evolving enterprise mannequin have been actual, however my perception within the firm and its future is unwavering,” she later added.

Officers, together with California Legal professional Common Rob Bonta, have questioned what would occur to the genetic information collected by 23andMe though the corporate’s privateness insurance policies say the info might be offered to different companies. The corporate stated the chapter course of won’t have an effect on the way it shops, manages or protects buyer information.

23andMe garnered a number of consideration from buyers when it was first taken public through a special-purpose acquisition automobile (SPAC) run by billionaire Richard Branson at a $3.5bn valuation in 2021. Its market worth peaked later that yr at almost $6bn resulting from booming curiosity in DNA testing kits, however demand has waned since, hurting 23andMe and its Blackstone-owned rival, AncestryDNA.

Gross sales of the patron kits regularly picked up through the yearend holidays, however 23andMe has struggled to retain prospects primarily as a result of individuals would use the kits as soon as and see little cause to order one other one. Bernstein Analysis analysts stated the marketplace for ancestry testing kits is perhaps near tapped out.

In 2023, hackers uncovered the non-public information of almost seven million 23andMe prospects over a five-month interval, dealing a significant blow to the corporate’s popularity and compounding its progress issues. The breach raised alarm amongst prospects involved about their privateness and the way DNA-testing companies deal with their information.

23andMe finally agreed late final yr to a $30m settlement in a lawsuit associated to the breach.

Based on a promise

23andMe was based in 2006 with a promise to revolutionise the way forward for genetics and healthcare. The corporate turned identified for its saliva-based DNA testing kits, bought by thousands and thousands of consumers wanting to be taught extra about their ancestry, and later dived additional into well being analysis and drug improvement.

However latest years have been removed from clean crusing for it. And Sunday’s voluntary chapter submitting caps months of turmoil.

In September, all of its impartial administrators resigned in a uncommon transfer after acquisition negotiations with Wojcicki.

The corporate then introduced in November that it will lay off 40 % of its workforce, or greater than 200 workers, and discontinue its therapeutics division. And in January, the board’s particular committee stated it was exploring strategic options, together with a attainable sale.

Past the info breach, uncertainty concerning the firm’s future general has additionally led some to just lately urge 23andMe prospects to delete their information.

On Friday, days earlier than 23andMe’s chapter submitting, Bonta issued an pressing alert reminding 23andMe prospects of their authorized rights underneath state legislation and known as on them to think about deleting and destroying any genetic information held by the corporate. Bonta’s workplace pointed to 23andMe’s ongoing monetary misery and “trove of delicate shopper information” the corporate has amassed.